The shift from cost savings to business growth is on for enterprise cloud computing.
Cloud deployments are reaching a tipping point, with companies expecting to have 60% of their total IT environments in a public, private, or hybrid cloud by 2018, up from 45% in 2016, according to IDG’s latest Cloud Computing Survey. To date, the main benefits of enterprise cloud solutions largely have been IT-centric business drivers. A 2016 survey by B2B research firm Clutch shows that nearly half of IT professionals (47%) at medium or large enterprises surveyed cited “increased efficiency” as the top benefit from using the cloud, followed by security (45%) and data storage (41%). In the IDG study, lowering total cost of ownership (TCO) was the top driver of cloud investments.
Greater efficiency, scalable storage, better data protection, and an enhanced development environment all are indisputably beneficial to an enterprise. However, they’re simply a means to an end. Yes, CIOs need a digital framework for reduced operational costs, improved risk management and a more strategic deployment of IT resources; but there comes a time when this newfound power and agility must be put to the test to change the course of business.
A new ecosystem for growth
This next phase of enterprise cloud computing involves leveraging the cloud’s scalability, agility, and flexibility to drive new results across the entire business. Using IT to automate existing business process has achieved steady results in growing revenue, profits, and customer loyalty. Today we are on the launching pad of a different kind of business advancement – the kind that comes from business process transformation and new ways of engaging customers.
The objective is no longer to improve the speed of the transaction, but to reshape how business is conducted. Measurements of processor clock speed, bandwidth, and IOPS lose relevance when IT’s primary concern shifts to the job of discovering a better way for customers to rent cars. This new phase of IT is all about tangible business outcomes, from improving delivery routes across the supply chain to automating the diagnosis of skin cancer for faster and more accurate results. It will make use of machine learning, artificial intelligence, analytics, and involve a whole interconnected internet of things.
The shift is pervasive. Industries will be disrupted and business process will be redefined. Anyone clinging to the applications and infrastructure that run the business process of yesterday will be fighting against inevitable obsolescence –
regardless of how advanced the applications and infrastructure.
If it’s starting to sound like simply moving old applications that support old business process to a new cloud location might not be enough, then you’re beginning to grasp what’s required for this new ecosystem for growth.
The new approach begins with a foundation for collecting, storing, and analyzing data. The job of that foundation is to extract knowledge from analyzing data so that it can be put into action – in a fully automated way – to alter business processes and improve customer experiences through new applications. This is digital transformation and it reaches from the data center to the sales floor, and across all business units, processes, partners, and customers.
Cloud at the center
Cloud computing is at the center of it all, but not all cloud deployments do a digital transformation make. Enterprise leaders are just beginning to make digital transformation a top priority. A Forbes Insights survey of executives across several continents shows that more than half (51%) consider investing in new technologies to achieve digital transformation to be their top priority, while 41% said the top drivers of digital transformation are new business models.
Here are just a few examples of the impact the cloud is having on business in these early stages of digital transformation:
- A worldwide supplier of printed checks and financial services wanted an IT infrastructure that would facilitate business growth and new services by reducing complexity, cost, and risk while shortening time to market. By implementing a highly automated converged infrastructure and managed cloud services, the organization has been better able to integrate acquired companies and next-generation security into its business practices while accelerating delivery of new products and services.
- A global builder of industrial plants deployed a cloud-based mobile platform designed to make it easier for employees anywhere to share data with customers, suppliers, and partners when they need it. This has resulted in increased employee productivity, a critical benefit in an industry ruled by deadlines and budgets.
- A provider of online legal research and data moved to a private cloud to accommodate growing data storage needs while maintaining its historically high levels of customer service. As a result, it was able to process case data 20% to 30% faster, making it easier for customers to access the data more quickly in order to meet filing deadlines and strategize.
- Healthcare providers are under increasing pressure to share data for care coordination and medical research. A large hospital with more than 1,200 beds met its growing data storage and interoperability requirements through a cloud-based platform that lets clinicians with mobile devices quickly access relevant patient medical and insurance information at the point of care.
Business at the speed of data
In today’s hypercompetitive business environment, customers have greater demands, more options, and less loyalty than ever. Indeed, 8 seconds of mobile website buffering can lose a sale, while a competitor is just a Siri request away. But speed and convenience are only one dimension. Actively engaging with customers and empowering them seems to hold the most promise for improving customer experience to regain and retain customer loyalty. Improving customer experience is the No. 1 driver of IT investments in the year ahead, according to CIO’s 2017 State of the CIO study.
Meeting these demands requires enterprises to deploy emerging technologies that can generate, collect, store, and analyze unprecedented volumes of digital data. These technologies – including mobile devices and apps, geolocation services, collaboration software, analytics platforms, digital transaction software, and more – can empower employees to be more productive while meeting the multichannel service demands of modern consumers.
Enterprises are looking to private and hybrid cloud for the kind of benefits that do more than just improve IT. They are looking to provide a real business advantage. Things like outcome-based services, Public-cloud consumption models, and
predictable pricing let IT help the enterprise make real business impacts – identifying and exploiting new market opportunities and building and extending existing brands.
Achieving digital transformation also requires the ability of these modern technologies to leverage legacy IT services, such as CRM and ERP software, a
major investment for many large enterprises. New business process and new applications may still rely heavily on legacy IT services.
Field or store sales professionals, for example, need the customer information, product specifications, analytics, special deals, and financing options in real-time for the context and situation they are in at the moment. Analytics will be as big a part of customer service and increased sales as information access. IT infrastructures that lack the advanced attributes of cloud and analytics may present obstacles to the scalability and flexibility needed to deliver data and services in the digital age.
Emerging self-service models for cloud applications will help CIOs capture business benefits by making it easier and more cost-effective to launch applications through a web-based portal. The built-in control and transparency enabled through self-service catalogs will also help IT teams more closely align IT resources with the needs and activities of the business.
Changing the nature of business
The future will not be defined by making the business process of today faster, more convenient or cost less. The competitive imperatives of digital transformation compel an enterprise cloud strategy that extends beyond reducing IT costs. The drivers of digital transformation will be new business processes that change the very nature of business and how effectively and efficiently IT can support them.
Now the big decisions are about how well you:
- Select the cloud model that best serves your business goals, and
- Choose the right cloud partner.
Large enterprises that haven’t begun their cloud journey, as well as those that need assistance to make further progress, should look for a cloud partner with the strategic vision, knowledge, tools, and expertise to build and deploy managed cloud services that enable them to achieve real business growth and to succeed in the digital economy.
Want to Learn More?
To learn more about how Hitachi Data Systems can help in your journey from cloud investment to business growth, visit our Cloud Solutions page.